Occupational Profile: Insurance Sales AgentsApril 9, 2018 Homes, cars, health. These are some of the most important and expensive things in one’s life and need to be protected in case of damage or loss. When wading through the possibilities of the different coverage, an insurance sales agent often comes into play. Insurance sales agents sell life, property, health, automotive, or other types of insurance. They work with potential and current customers to sell the different types of insurance. They explain the various insurance policies and help customers chose the plans that best suit their needs.
Most insurance sales agents work in a traditional office environment, although some may spend time traveling to meet with clients. Most work full time, although according to the Bureau of Labor Statistics about one out of five insurance sales agents work more than 40 hours per week.
Insurance sales agents are middlemen between the customers and the insurance companies. Depending on what company the agent works for, an agent is considered either a captive agent or an independent agent. Captive agents work exclusively for one insurance company and can only sell policies provided by the company that employees them. Independent insurance agents sell the policies of a variety of insurance carriers. They match insurance policies for their clients with the company that offers the best rate and coverage.
Uptown Insurance in Salem, Oregon is an example of an independent insurance sales company. Bryan Miller, owner and agent at Uptown Insurance, and Brandon McElroy, agent, sat down with me to talk about working in the insurance business. Both readily admit that Uptown Insurance is different than the traditional insurance company. In the traditional environment, cold calling potential customers and marketing your services are a big part of the job. But agents at Uptown Insurance operate on a referrals-only system. This means they get clients through referrals from current customers and from lenders who recommend them to homebuyers. Agents at Uptown Insurance typically spend their days getting coverage quotes for new clients and handling billing questions from existing clients. Both Miller and McElroy noted that there is no slow day or even slow time of year for insurance agents. Insurance policies typically renew every six months, so there is always something to work on.
Working as an independent agent can offer more flexibility in the work environment. With technology, the job can be done anywhere. A lot of communication is done online via email and Skype, so Uptown Insurance allows agents to work from home. One agent in Bend, Oregon works out of the coffee shop he owns.
But there are difficult parts of working for and owning an independent insurance company. When starting the independent agency, as Miller did seven years ago, you have to work diligently to get contracts with insurance carriers. Once you have the initial contracts and have good relationships with some carriers, it gets easier to attract carriers to contract with you.
Education, Training, and Licensing
A high school diploma or equivalent is the typical requirement for insurance sales agents, although a bachelor’s degree may give one a competitive advantage in the labor market. However, Bryan Miller at Uptown Insurance notes that education is not the most significant qualification he looks for in an employee. “The way people communicate is very important,” he said. “Developing relationships with customers is the most important thing.” Miller also says that being adaptable to the changes in the industry and products is vital, as is the ability to think on your feet.
Insurance sales agents must be licensed in the state where they work. In Oregon, the type of license necessary for an agent depends on the kind of work being done and where the agent resides. To be licensed in the State of Oregon as an insurance sales agent requires initial testing and training, as well as continuing education every two years to renew the license.
If you reside in Oregon and sell, negotiate, or solicit insurance, you must be licensed as a resident insurance producer (agent). To obtain the licensure, you must have residence or a place of business in Oregon, be 18 years or older, pass a written examination, disclose any criminal convictions, pass a background check, and complete the required pre-licensing training. This training consists of 20 hours of each property and casualty insurance training; personal lines training; life insurance; and health insurance training. The license must be renewed every two years and continuing education is required for renewal. Twenty-four hours of continuing education are required each renewal period, which must include three hours of Oregon law training and three hours of ethics for insurance providers.
If you reside or operate a business outside of Oregon, you must be licensed as a nonresident insurance producer (agent). In order to negotiate or bind ceding reinsurance contracts on behalf of an insurer or manage all or part of the insurance business of an insurer, and underwrite a certain amount of gross direct written premium, you must be licensed as a managing general insurance producer (agent). Surplus line insurance producers, or those who place insurance with eligible surplus line insurers companies and typically sell insurance to individuals or firms involved in high risk categories or extraordinary situations must be separately licensed. One can also be licensed as an insurance consultant, which is someone who sells only advice or offers opinions for a fee regarding insurance.
The pre-license training hours can be done in a classroom or online. Training schools and online training providers can be found on the State of Oregon’s Division of Financial Regulation’s website. Continuing education providers can be found on the National Association of Insurance Commissioners’ website.
In 2017, the average hourly statewide wage for insurance sales agents was $30.52. However, the average wage varied greatly depending on where in the state the insurance sales agent is working. The highest average wages were found in the Portland-Metro area (Multnomah and Washington counties) at $41.89 per hour. The lowest average wages were found in the Southwestern area of the state (Curry, Coos, and Douglas counties), at $20.84 per hour.
The agents at Uptown Insurance noted that in their experience, wages can vary based on the type of insurance you sell and the company you work for. Life insurance sales agents can make different wages as opposed to agents that sell property and casualty insurance. Miller and McElroy also pointed out that different companies can pay on different schedules. Some may pay minimum wage plus commission (a fee paid to an agent per transaction, typically a percentage of the sale price), others may pay a salary with no commission but have the opportunity for bonuses based on your sales. Some can even work only for commission. It is important to learn how you will be paid when looking into job opportunities.
Current and Future Employment
Insurance sales agent employment in 2014 in Oregon was almost 5,000. From 2014 to 2024, the Oregon Employment Department projects that employment in the occupation will grow 11.7 percent. Annually, about 131 openings are expected to be replacement openings, or openings created from someone leaving the occupation for reasons like retirement. The other 59 annual openings are expected to come from growth, or new insurance sales agent positions.
There are large differences in current employment and future employment projections across the state. The Portland-Metro area by far employed the most insurance sales agents in 2014, 2,330. Southwestern Oregon employed the fewest of any region, with only 113 agents employed in 2014. While the Portland-Metro area is expecting the largest increase in employment from 2014 to 2024 (+176), the Clackamas area is expected to have the largest change in employment, 23.7 percent. Southwestern Oregon and Northwest Oregon (Washington, Clatsop, Tillamook, Lincoln, and Benton counties) are expected to only increase insurance sales employment by 0.9 percent and 1.2 percent, respectively.